Apple was just a computer company until it launched the iPod and the iPhone. Were Steve Jobs & Co. "arrogant" for thinking they could succeed in other businesses? Maybe. But arrogance didn't keep the iPod and iPhone from taking the market by storm.
As far as a Google phone goes, it's worth noting that, in many markets outside the U.S., people actually PAY significant prices for GSM phones that can be used with any carrier instead of buying a relatively cheap subsidized phone in return for a signing an expensive one- or two-year phone-service contract. So, even if Google's unlocked, carrier-agnostic phone doesn't take the U.S. by storm, it may not have to: after all, the population of the EU alone is considerably larger than that of the United States. If Google's phone has features that users like and isn't appreciably more expensive than competing phones are, it may do quite well. For that matter, if Google can break even on its phone and build awareness for Android, that may be reason enough to bring the device to market.